The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock. Figure 16.2
- According to Figure 16.2,what will be a necessary result of a simultaneous increase in the supply of stocks from S to S'and decrease in the demand from D to D'?

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock. Figure 16.2

- According to Figure 16.2,what will be a necessary result of a simultaneous increase in the supply of stocks from S to S'and decrease in the demand from D to D'?

Quizplus · Accepted Answer

According to the law of supply and demand, an increase in supply and a decrease in demand will result in a surplus of shares, causing the price to decrease. Therefore, the necessary result of a simultaneous increase in supply and decrease in demand is a decrease in the price of the shares (option A). The other options are not necessarily true based on the given information.

The Figure Given Below Shows the Demand [D and D']